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Can home ownership be more attainable in Delta, Metro?

The RBGV presented recommendations on how to clear a path to home ownership
Delta’s Housing Needs Assessment report concluded that the numbers show that those who do not own are likely to continue renting for the foreseeable future as the affordability gap continues over time. Sandor Gyarmati photo

Home ownership continues to trend downward in the City of Delta.

That’s according to a city report on housing trends, which notes that Delta’s private housing stock grew by six per cent from 2016 to 2021, in line with population growth, with the majority of that growth (85 per cent) being condos, townhouses and secondary suites.

Home ownership in Delta, though, has been trending down, decreasing from 78.8 per cent in 2016 to 75.6 per cent in 2021. The decline has been a consistent trend in Delta as home ownership in 2011 stood at 81 per cent.

Meanwhile, the proportion of renters has increased from 21 per cent in 2016 to 24 per cent in 2021.

The report, which uses Census data, also notes the numbers do not include other key housing indicators, such as affordability or the relationship between housing stock and specific needs in Delta.

A recent market update by the Real Estate Board of Greater Vancouver (RBGV) found that the benchmark price for a single-family detached house in Ladner and Tsawwassen had a 128 per cent and 124 per cent increase respectively over the last decade.

Over that same time, the benchmark price for a Ladner and Tsawwassen townhouse rose 150 per cent and 84 per cent respectively. The benchmark price for a Ladner condo during that time rose 162 per cent and in Tsawwassen it was 117 per cent.

According to a previous Metro Vancouver report, the region has seen an increasing gap between incomes and housing costs, as over the past 20 years the ratio of home prices to income has increased dramatically.

Before the year 2000, the sale price of a two-storey detached home was around 3.2 times the median annual household income, but by 2015, the cost of an average home was more than 19 times higher than income, the Metro report notes, adding that with high prices preventing people from home ownership, the pressure on the rental market continues to increase.

The RBGV recently highlighted that its recommendations to the provincial government’s Select Standing Committee on Finance on May 30th was directly quoted in a committee report released this month.

Among the recommendations put forward by the real estate board is for the province to conduct a comprehensive review of the property transfer tax (PTT), which hasn’t been done since the tax was implemented in 1987, as well as removing the tax on any new or resale home costing less than $750,000.

Saying realtors are seeing a sense of urgency among renters who perceive the possibility of home ownership slipping away, the RBGV’s submission notes, “The PTT also significantly lengthens the time required to save to buy a condo in Greater Vancouver. Renter households who are already the most economically disadvantaged, as represented by those paying more than 30% on shelter costs, are the hardest hit by the PTT. For these households, the PTT can lengthen the time needed to save to achieve home ownership by five years or more.”

The RBGV also recommended increasing the First-Time Home Buyers’ Program PTT exemption threshold on resale homes to $750,000 from $525,000 to match the newly built homes exemption, as well as exempting pre-sales from the tax.

The RBGV also recommended indexing PTT thresholds using the consumer price index, and making adjustments annually for the two and three per cent thresholds on a sliding scale tied to BC Assessment values.

Also, among the recommendations is using PTT revenues to provide financial incentives to renters buying missing middle homes in walkable, mixed-use, transit-oriented communities with smaller housing choices.

In its report released this month, the committee noted its members recommended reviewing the First Time Home Buyers program’s PTT exemption threshold to better reflect current market conditions.

As far as the proposed flipping tax, the real estate board recommended including exemptions so the tax doesn’t unfairly penalize those most likely to move, as well as ensuring new construction homes are exempt and that the tax doesn’t discourage investment in secondary suites

The proposed tax, designed to prevent speculation, will have negative spillover effects which penalizes renters wanting to buy a home, the RBGV submission states.

“Younger households tend to move most frequently according to Statistics Canada, and this is most often due to changes in life circumstances such as a new job or new family member. Younger households are also most sensitive to expenses such as mortgage costs and taxes. The flipping tax would create a significant disincentive for younger households to move. The downstream consequences will hurt renter households the most,” the submission warns.

The submission also had other recommendations to improve the rental supply, noting that with a near-zero vacancy rate, communities throughout Metro Vancouver are desperately in need of new purpose-built rental buildings, while rental housing developers face escalating costs, making projects less viable.